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Want to Buy Autodesk (ADSK) Stock? Here’s What You Need to Know

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Alex Smith
·3 min read
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RiverPark Advisors, LLC recently published its Q3 2020 RiverPark Large Growth Fund commentary – a copy of which can be downloaded here. During the third quarter of 2020, the RiverPark Large Growth Fund returned 10.84% (institutional shares), compared to the total return of 8.93% by the S&P 500 Index. You should check out RiverPark’s top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q3 2020 Investor Letter, RiverPark highlighted a few stocks and Autodesk Inc. (NASDAQ:ADSK) is one of them. Autodesk Inc. (NASDAQ:ADSK) is a software company. Year-to-date, Autodesk Inc. (NASDAQ:ADSK) stock gained 52.3% and on December 9th it had a closing price of $279.42. Here is what RiverPark said:

"Autodesk: Autodesk was our final top detractor for the quarter. The company reported second quarter results that exceed expectations across all key metrics, but slightly lowered its billings and revenue outlook (by 1%), anticipating a slow recovery in the U.S. and U.K. In the second quarter, revenue was $913 million, up 15%, with subscription revenue (92% of total revenue), up 27% year over year, and a 29% Non-GAAP operating margin, up 500 basis points year over year (non-GAAP EPS of $0.98, increased 51% year over year).

Autodesk has a near monopoly on software for designing, building and managing buildings, as well as software for infrastructure and manufacturing plants, prototyping software for manufacturers of products (including autos, machinery and consumer products) and document sharing. The company expects to grow revenue 15%-19% annually over the next several years (which they were exceeding pre-COVID), and, as we have seen happen in similar SaaS conversions, as revenue scales, operating margins are expected to expand significantly from second quarter’s 29% to more than 40%, in-line with peers. We believe that ADSK shares can compound along with its free cash flow growth (expected to be 20%+ per year) over the next several years."

16 Most Technologically Advanced Countries in the World in 2017
16 Most Technologically Advanced Countries in the World in 2017

Stasique/Shutterstock.com

In October, we published an article revealing that Polen Capital Management is bullish on Autodesk Inc. (NASDAQ:ADSK) stock. The investment firm believes that the company is on a strong growth trajectory.

In Q3 2020, the number of bullish hedge fund positions on Autodesk Inc. (NASDAQ:ADSK) stock decreased by about 3% from the previous quarter (see the chart here), so a number of other hedge fund managers don't believe in Autodesk's growth potential. Our calculations showed that Autodesk Inc. (NASDAQ:ADSK) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

Disclosure: None. This article is originally published at Insider Monkey.